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April 18--A fraudulent insurance acts charge against disbarred lawyer Melbourne Mills Jr., who represented clients in a multimillion-dollar fen-phen diet drug settlement, was dismissed this month in Fayette Circuit Court.
Mills was accused of providing false, incomplete or misleading information to Continental Casualty Co. of Chicago in a malpractice insurance renewal application in 2003. The Fayette commonwealth's attorney's office maintained that Mills didn't tell the insurance company that he was being investigated by the Kentucky Bar Association at the time he requested renewal of his liability insurance.
Continental Casualty paid $233,674.49 for legal representation of Mills under the renewed policy, which had a $5 million liability limit, according to Fayette Circuit Court documents. The legal representation was for Mills' defense in a lawsuit against him by his former fen-phen clients.
A Fayette County grand jury indicted Mills in January 2011 on the felony fraud charge.
In late March, assistant Fayette commonwealth's attorney Benjamin Willis asked Fayette Circuit Judge Ernesto Scorsone to dismiss the indictment without prejudice. Willis said the commonwealth's attorney's office was satisfied with a sworn affidavit from an attorney who represented Mills, which said that Mills was acting under the advice and direction of an attorney when the actions for which he was indicted took place.
Scorsone sustained the commonwealth's motion.
Lawyers William Gallion and Shirley Cunningham were convicted of scamming more than 400 clients out of millions of dollars they had won against fen-phen maker American Home Products. Fen-phen was taken off the market after users developed heart problems related to the drug. Mills was acquitted of criminal charges in the case, but the state bar association voted to disbar him for his role in the case.
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